Securing the necessary working capital to meet daily operational expenses and fuel business growth is often a critical step for small businesses across New Zealand.

Whether you’re a start-up looking for a leg up or an established business seeking to expand, obtaining a business loan can be a game-changer. To help you navigate what can seem like an overwhelming world of financial options, loan applications and fine print, we’ve put together this guide on how to get a business loan.

Preparing for Your Business Loan Application

1. Assess Your Needs

It is important to ensure you take the time to evaluate your business’s financial requirements. Unlike personal loans, business loans are provided specifically for use within your business. Understanding precisely how much capital you need and how you intend on utilising it will help secure confidence from your potential lender.

Start by forecasting future cash flow, identify areas you need to invest more capital, and build into both of these projections an understanding of what repayment capabilities you may have.

2. Organise Your Financial Documentation

Finance providers and lenders will ask for financial history records to assess the risk of extending you the loan and will use its information to determine the loan terms. Having the right documentation upfront will save you time, energy and hassle.

Ensure you have all of your tax records and returns, bank statements, financial statements and any other relevant documentations. It’s important for a successful application that these documents are up to date and accurately reflect the financial health of your business.

3. Review or Develop a Business Plan

A comprehensive and well-crafted business plan not only expresses your vision and strategy but also demonstrates your financial literacy and responsibility. Outlining the objectives of the business, revenue projections and market analysis will give lenders the confidence that you have a repayment strategy.

Business plans also show how a potential loan is going to be utilised and this instills further confidence in lenders.

How To Apply for a Business Loan

1. Find the Right Financial Provider

Finding the right lender for you is essential. 

Research Lenders – Take the time to evaluate the different financial institutions, online lenders and credit units that may be able to offer your business the loan it needs. Consider factors such as:

  • Reputation
  • Customer service
  • Loan offerings
  • Specialisation (e.g., industry etc.)

Seek Social Proof – One of the best ways to find the best lenders is to tap into your network for recommendations and check out reviews of past clients of the lender you’re considering. These invaluable perspectives will indicate how the client experience was and how reliable the finance provider may be.

Ask for Professional Advice – Business consultants, accountants and financial advisors can all offer professional guidance on the type of lender that may best suit your needs and your business’s objectives. Making an informed decision that aligns with your goals is very important, and the right professional advice can go a long way to assisting you in navigating this area of finance.

2. Apply for the Right Business Loan

Business loans actually come in a variety of forms. Each one offers its own terms and conditions, interest rates and repayment schedules.

By thoroughly investigating each option and speaking with a trusted professional advisor, you can make a more informed decision as to which of the many types of financing best aligns with your business’s needs.

3. Review the Terms and Conditions

The ‘fine print’ so to speak of a business loan might not seem like much fun to review, but doing the work now can save your business a significant amount of money in the future.

Interest Rates and Fees

Interest rates can impact the total cost of borrowing quite substantially. Compare the interest rates offered by different lenders to find the one more favourable to you. Additionally, consider whether a fixed or variable interest rate is best suited to your financial position, objectives and needs.

But don’t forget that it’s not all about interest rates. There are other fees as well which can inflate the overall expense.

Repayment Terms

The repayment schedule of a loan will be included in the terms and conditions. These can include anything from the loan term in its entirety, to the frequency of repayments, and even an outline of penalties for early repayments. That’s why these terms are important to review; They need to align with your own cash flow projections and business cycle fluctuations.

Collateral Requirements

Many business loan providers require collateral to secure the loan. This means that some sort of asset, most commonly real estate but it can be certain types of equipment in some situations, must be ‘put up’ as the security. Make sure you both understand the security requirements, have the assets available and understand the implications of offering the asset as collateral. Always consider the potential risk to your business (and possibly your personal finances) in the event that your business defaults on the loan.

Find the Right Business Loan with ScotPac New Zealand!

Securing a business loan can be a pivotal moment in your business’s journey towards long term success. 

While meticulously preparing your documentation and understanding loan terms are critical steps in a successful application, to embark on this journey with confidence you need to find the right financial partner.

After all, obtaining a loan is not just about securing working capital, fast —it’s about strategically positioning your business for sustainable growth and success in the market. That’s where ScotPac comes in.

As the largest non-bank lender across New Zealand and Australia, the breadth and depth of our finance and working capital solutions will ensure you can find the best business loan to suit you.

Our tailored working capital solutions are designed to suit individual business needs and ensure long-term growth with confidence.

Want to find out more by having a confidential and no-obligation discussion with one of our lending specialists? Enquire now and find out about how our business loans can help your business succeed!